FTA must cover labor and green concerns

By Lai I-chung 賴怡忠 /

Tue, Nov 26, 2013 - Page 8

A few days ago, Taiwan Labor Front representatives said at a public hearing in the Legislative Yuan on the cross-strait service trade agreement that the deal should include labor provisions in the same way as the free-trade agreement (FTA) between Taiwan and New Zealand. One of the vice ministers of economic affairs responded that the FTA between South Korea and the EU lacked such provisions, that trade agreements deal with trade, and that not every FTA includes labor provisions, thus implying that the inclusion of such provisions is not necessary.

Although the FTA between South Korea and the EU does not include labor provisions like the one Seoul has with the US, it does include labor and environmental issues in a chapter on trade and sustainable development. This chapter not only undertakes not to lower labor standards for trade reasons, but also establishes an advisory team to monitor the state of labor and environmental protection.

The main difference between this agreement and the one made between South Korea and the US is that the latter included resolution of labor and environmental issues in the agreement, while the former calls for such matters to be dealt with through negotiation.

The Ministry of Economic Affairs’ (MOEA) response to the FTA issue is a reflection of its understanding of its own duties and responsibilities, and it even sees such provisions as an obstacle to free trade. However, this is no longer the prevailing view of how FTAs work. Such agreements now place more focus on maintaining the conditions for free competition and fair trade.

Using the parts relevant to labor as an example, in order to take advantage of FTAs to remove tariff barriers, some countries will lower labor conditions and even use child or prison labor to attract foreign investors to set up factories for export manufacturing to improve their own competitiveness. Such behavior is now seen as unfair competition.

The same conflict appears when a country lowers its environmental protection standards in order to attract foreign investment, and this was one of the causes of the labor protests during the 1999 WTO meeting in Seattle. Today, almost 15 years later, labor and environmental conditions have become an inseparable part of fair trade.

Labor and environmental provisions are now issues that must be explicitly handled in the text of FTAs. It is not simply a matter of sending a delegation to the US to declare that Taiwan wants to become part of the Trans-Pacific Partnership (TPP). How to handle labor provisions is one of the main issues being discussed in TPP talks.

The government constantly talks about how Taiwan wants to negotiate an FTA with the US, but every FTA Washington has signed since 2004 has included special labor provisions, while the MOEA says that labor provisions are not important. Does this mean that talk about joining the TPP and signing an FTA with the US is just hot air?

Today’s FTAs have been transformed into fair-trade agreements. The time when such agreements could be seen as import tariff exemption agreements is over. This is why New Zealand included labor and environmental provisions and even provisions for cooperation with Aborigines in its pact with Taiwan. These are modern views that Taiwan should have adopted on its own initiative, as it would offer the nation a good opportunity to use them as a ticket into the TPP. Now it seems any such hopes may have been smothered by bureaucrats.

The MOEA’s response left me dumbfounded, but the lack of response from the Council of Labor Affairs, the Environmental Protection Administration and the Council of Indigenous Peoples was equally shocking.